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It is said that there are only two things in life that are certain. These are death and
taxes. As much as we hate paying it, taxes are integral and crucial elements for
society to run properly and for the bureaucracy to operate efficiently. It provides the
money for public health, education, infrastructure and other things that a country
needs.
Businesses, however, are always on the lookout for profit. The less expenses that
one incurs, the higher the profit. And taxes are expense items that can dent the
bottom line.
So which countries are the most friendly in terms of tax rates? Which countries charge
the least to a company in relation to the latter’s commercial profit? Here are the 10
countries with the lowest tax rates.
10. Bahrain – 15 percent
Bahrain is considered to be one of the fastest growing economies in the Arab world.
It is also the 12th freest economy in the entire world and is considered tops in the
entire Middle East region. The country is abundant in oil, with petroleum products
accounting for 60 percent of all exports and 70 percent of government revenues. It
also makes up 11 percent of the country’s gross domestic product. The country also
has a significant aluminum sector and vibrant finance and construction industries. It
does not impose any tax on profits, while labor tax stands at 14.6 percent. There are
also other taxes at 0.4 percent, though the entire tax burden is only 15 percent.
9. Saudi Arabia – 14.5 percent
Saudi Arabia is the second largest Arab country in terms of land area after Algeria.
It is considered as the birthplace of Islam and is the site of Mecca and Medina, the
two holiest sites in the Muslim world. It has been ruled by an absolute monarchy
ever since it was created. It owns the second largest reserves of oil in the world, with
the product accounting for more than 95 percent of its exports and 70 percent of its
revenues. It has a total tax rate of 14.5 percent, with labor tax amounting to 12.4
percent and profit tax at 2.1 percent.
8. Zambia – 14.5 percent
Zambia is a former British colony in the southern portion of Africa. It was named
by the World Bank to be the fastest economically reformed country in the world
in 2010. Still, the country’s rate of economic growth has not been able to cope up
with the increase in population. More than 2/3 of the population still lives below the
poverty line. It, however, has been trying to complement its economic reforms with
improvements in social sector delivery systems. It charges a profit tax of 1.5 percent,
plus other taxes at 2.6 percent. Total tax burden is 14.5 percent.
7. United Arab Emirates – 14.1 percent
The United Arab Emirates is an Arab country that is made up of seven principalities
that are each governed by an Emir. The principalities, or emirates, are Abu Dhabi,
Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain. It has the
seventh largest reserves of oil in the world and the 17th largest resource of natural
gas. It is one of the most developed economies in West Asia, with a per capita
income that is one of the highest in the world. Total tax rate is 14.1 percent, all of
which come from the labor tax. There are no profit or other taxes charged.
6. Qatar – 11.3 percent
Qatar is an Arab country blessed with abundant oil and natural gas resources. It is
one of the richest countries in the world, with its citizens and residents enjoying the
highest GDP per capita anywhere. It also has one of the highest growth rates and
the country has the highest human development index in the Arab world. Total tax
rate is 11.3 percent, with no profit or other taxes.
5. Namibia – 9.8 percent
Namibia is a country in Africa that used to be part of South Africa. It gained its
independence in 1990. It is one of the least densely populated countries in the world.
Its main source of revenue is the mining industry because of the presence of gold,
silver, uranium, base metals and gem diamonds. It also has vibrant agriculture and
tourism sectors. Total tax burden is 9.8 percent, broken down to 4 percent profit tax,
1 percent labor tax and 4.8 percent other taxes.
4. Macedonia – 9.7 percent
Macedonia is a country in the southeastern portion of Europe that was a part of
the former Yugoslavia. It became an independent country in 1991. The World
Bank has ranked it as the fourth best reformatory state in 2009. It has an open
economy brought about by considerable reforms that have been introduced since its
independence. The total tax rate is 9.7 percent, with companies charged 6.3 percent
for its profits and 3.4 percent as other taxes.
3. Maldives – 9.3 percent
Maldives is an island nation located right in the middle of the Indian Ocean. It
is considered to be the smallest Asian country in terms of both land area and
population. It is also considered to be the lowest country on the planet, with its
highest natural point at only 2.4 meters above sea level. Its economy is mainly
driven by tourism, which accounts for 28 percent of GDP and 60 percent of foreign
exchange receipts. Total tax rate is 9.3 percent, though it doesn’t charge any profit or
labor tax.
2. Vanuatu – 8.4 percent
Vanuatu is an island nation located in the South Pacific Ocean. The main cogs of
its economy are agriculture, tourism, cattle-raising and offshore financial services.
There is practically no mining sector and small industries exist only to serve the local
market. Total tax burden is 8.4 percent, divided into 4.5 percent labor tax and 3.9 percent for other taxes.
1. Timor Leste – 0.2 percent
Timor Leste is a country in Southeast Asia. It used to be part of Indonesia before
it gained independence in 2002. It has discovered oil and gas reserves offshore
but most of the country still relies on subsistence farming. It charges a meager 0.2
percent in other taxes to companies doing business in the country.
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